Kraken.com Review 2021 – Scam or Not?

Kraken is a recognized cryptocurrency exchange that has been offering their trading services since 2011. The platform currently allows users to buy and sell more than 90 digital assets agains USD and other fiat currencies such as GBP, EUR, USD, CAD, JPY, CHF and AUD. Not only you can directly buy all these cryptocurrencies but you can also profit from their margin and futures trading services, which allow you to leverage your positions up to 5x and 50x, respectively. Through enhanced security features, users can safely trust their funds while enjoying a smart trading experience with low fees. Based in Chicago, Kraken is still one of the few crypto exchange platforms that offer Bitcoin margin trading with for US residents, although their services are not limited to this region and can be used in multiple countries worldwide.

More than 8 million users are actively using Kraken and is supported by several big institutions like Blockchain Capital, Tribe Capital, Humming Ventures, Digital Currency group, among many other financial giants that make it easier for users to trust Kraken’s services.

Review Contents

• Verification
• Fees
• Trading
• Ease of Use
• Customer Support
• Exchange Security
• Supported Payment Methods
• Passive income
• Market tracking features
• Supported Countries
• FAQ – Frequently asked questions about Kraken
• Conclusion

Kraken is one of the largest and oldest Bitcoin exchange in terms volume and liquidity. After trying to help MtGox recover from the hacking attack, Jesse Powell, a serial entrepreneur decided to offer the world the first professional BTC exchange – that’s how Kraken was born. The company was founded in San Francisco on 28th of July, 2011 and remains based in California.

You can follow updates related to Kraken’s services on their own blog, this is where they provide an overview of new features and services. On the social media channels, like Facebook, Twitter and Linkedin Kraken frequently engage with their followers and share stories from the industry.  Jesse Powell, CEO of Kraken presents and explains services and concept himself in video messages and often engages with the public. In Kraken’s podcast, Jesse talks with various guests about interesting topics beyond blockchain and cryptocurrencies. 

The platform is an excellent choice for European users, but after a number of acquisitions in the last couple of years, their focus has shifted from Europe to Worldwide market. Since 2017 they support USD deposits and they have introduced futures trading in early 2019.

Kraken.com has all the content on its website in English – even more, you can choose between US and British English to best suit your needs. Furthermore, the site is available in eight other languages, including Spanish, French, Italian, Portuguese, Russian, Turkish, Chinese and Japanese (even though Japan is currently not on the supported countries list). 

Verification

The verification process is straightforward, but Kraken can be a bit strict when it comes to the higher tier verifications. There are four tiers. Tier 1 take only a few minutes and performed automatically if everything is submitted corretly. It can take longer if the application requires manual review. Tier 2 abd 3 verification usually takes a couple of days to complete. Tier 4 (corporate verification) take currently more than 5 days due to increased demand.

Kraken doesn’t allow deposits, withdrawals or trading without verification. Here’s how the user’s limits increase with tiers:

Tier 1 (Starter) – Deposits and withdrawals are available in digital currency only. Trading, on the other hand, can be performed with digital as well as fiat currencies. Tier 1 verification requires:

• Full name
• Date of birth
• Country of residence and physical address
• Phone number verification

Tier 2 (Intermediate) – Deposits, withdrawals, and trading in digital currency are available. Margin trading is also available for verified accounts. Intermediate verification requires:

• Valid government ID
• Recent proof of residence
• Occupation
• Social Security Number (for US clients)

Tier 3 (Pro) – fiat currency deposits and withdrawals are available, and the funding limits, API call limites are way higher than in the intermediate verification. Tier 3 verification also allows margin trading. The verification requires a KYC to be filled out and signed.

Tier 4 (Pro Corporate) – Corporate account verification requires contacting support and providing company specific documents to support the application.

Deposit and withdrawal limits are sorted per tiers:

Tier 1 (Starter) – Fiat deposits and withdrawals are not possible. Deposits in digital currencies don’t have a limit, while withdrawals are limited to $5000 per day and $150,000 per month. Verification for Tier 1 requires some basic personal information without providing any supporting documentation.

Tier 2 (Intermediate) -Deposits and withdrawals in FIAT currency are both limited to $100,000 per day and $500,000 per month. Cryptocurrency withdrawals are limited to $500,000 per day and $15M per month. The verification requirement for Tier 2 is a government-issued passport and a proof of address..

Tier 3 (Pro) – Fiat deposits and withdrawals are limited to $10M daily and $100M monthly. Withdrawals in digital currencies are limited to $10M per day and $300M per month. There is no deposit limit for Pro users. Tier 3 verification requires and additional KYC questionnaire to be filled out and signed.

Kraken accepts the following fiat currencies:

• US dollar (USD)
• Canadian dollar (CAD)
• GB Pound (GBP)
• Euro (EUR)
• Japanese Yen (JPY)
• Swiss Francs (CHF)

And users can trade these cryptocurrencies:

ZEC, YFI, WAVES, USDC, UNI, TRX, GRT, XTZ, USDT, TBTC, SNX, STORJ, SC, XRP, QTUM, DOT, PAXG, OXT, OMG, OCEAN, NANO, XMR, XLM, LTC, LSK, KNC, KSM, KEEP, KAVA, ICX, GNO, FLOW, FIL, ETH, ETC, ETH2, EOS, MLN, EWT, DOGE, MANA, DASH, DaiDAI, CRV, ATOM, COMP, LINK, ADA, BTC, BCH, BAT, BAL, REP, REPV2, ANT, ALGO, AAVE

Possible trading pairs and fee schedule for each pair can be found here.

Kraken Fees Analysis

When it comes to fees, Kraken has reduced its prices drastically in order to stay ahead of the competition and currently is one of the cheapest trading platforms. The exchange charges the following fiat withdrawal fees:

EUR SEPA Withdrawal – EEA countries only €0.09

GBP SWIFT Wire Transfer – 0.125% with £35 minimum fee

USD SWIFT Withdrawal – all other countries 0.125% with $35 minimum fee

USD FedWire – available in the United States, $5 flat fee

CAD EFT – Canada only, 0.25%

JPY SWIFT – worldwide, 0.125% with $35 minimum fee

Cryptocurrency withdrawal fees and minimum amounts are different between each coin. Here are some examples, always refer to Kraken’s updated fee schedule for the current withdrawal fees.

• Bitcoin ฿0.0005
• Ether Ξ0.005
• Ether Classic ξ0.00500
• Ripple Ʀ0.02000
• Litecoin Ł0.02000
• Dogecoin Ð2.00
• Stellar STR 0.00002
• Zcash ⓩ0.00010
• Augur (REP) Ɍ0.01000

When it comes to deposits, Kraken charges flat fees for the majority of transfers. ACH  and Fedwire cost 5 USD, SWIFT deposits cost 35 USD / EUR and SEPA transfers are free if sent through Fidor bank. Most of the deposits performed in cryptocurrency are free, except for the smaller, less liquid coins. You can find the updated fee schedule for crypto deposits here. For some coins, Kraken also charges a small address setup fee. 

Trading Fees

Trading fees are charged for both maker and taker, and they start at 0.16% for the maker and 0.26% for the taker. As the trading volume increases, fees percentage steadily drops all the way to 0.00% for the maker and 0.10% for the taker.

Futures fees are charged between -0.020% (instant rebate for makers) and 0.075% for takers.

For margin trading, Kraken charges an opening fee of 0.01%-0.02% and a rollover fee of 0.01%-0.02% after every 4 hours until the leveraged position is open in the trading platform.

Trading

Kraken offers less than ten different cryptocurrencies for trading, but it is possible to make direct trades between all available pairs. Together with five fiat currencies, the exchange gives enough trading options for everyone.

For those who are looking to have maximum control over their trades, Kraken remains the best choice.

Margin trading is not available on all of the currency pairs, but only on the following most liquid altcoins:

Augur, Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Monero, Ripple, Tether. 

You can trade these coins with margin against the USD and EUR or against Bitcoin and Ethereum. The amount of leverage depends on the coin, which varies between 2x and 5x (Bitcoin and Ethereum).

The exchange recently introduced futures trading where you can trade on leverage up to 50x. Futures trading is available for verified users only outside of the US. Perpetual futures are available for Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin and quoted in USD.

Users can use various order types to manage risk like limit orders, advanced orders with predefined triggers, leveraged positions, margin trading as well as short selling.

XBT is Kraken’s short for Bitcoin, used instead BTC.

Ease of Use

Kraken software is highly rated for both professional and beginning cryptocurrency trading. The interface offers simple, intermediate and advanced templates, helping beginners to get their bearings and at the same time allowing expert traders to use all the advanced options they need.

The trading platform has an official iOS application and an Android application which include all the features you need for trading. Note that you need to connect your API key to the app, so familiarize yourself with the setup instructions before installing the app. Kraken Futures plafrom is currently running in a different applicaion for mobile devices, you can find the app in the Google Play store here or join the beta testing of the iOS app here. 

You can also use trade.kraken.com directly from your mobile as the platform is fully mobile-optimized already.

Support

Kraken offers 24/7 support, with instant email and chat responses. They are also active on social media. The support used to be low rated as it sometimes took a couple of days to react, so some people were forced to act like this guy couple of years ago to post on Reddit to get heard. Other than that, no serious complaints were posted.

Since then Kraken opened its own Reddit thread where they try to respond to user queries public where applicable.

Kraken also runs a unique call back system. You can leave them a message over a ticket on the platform and they call you back on your previously registered phone number. They do not have a direct hotline to avoid scam. The hours of operations are between Monday to Friday, from 12:00 to 24:00 UTC time. Note however that the phone support is not able to help in case of issues with verification, login or trading, can only provide general updates and help related to crypto deposits.

Kraken.com Security Check

Kraken is probably one of the most secure online cryptocurrency exchanges in the world. In the aftermath of the Mt. Gox collapse, Kraken was the first company to create a cryptographically verified proof of reserves which shows that the exchange holds 100% of customer funds, as it should. They hold the majority of funds offline in cold storage. Their servers are held in secure facilities with armed guards, retina scanners, and top-notch video surveillance.

The company has two-factor authentication, PGP encryption for email communication and global setting lock, which prevents any account changes in a particular time period.

So far Kraken hasn’t been hacked, but there were cases where careless users got their accounts hacked due to lack of 2fa security.

But even if their security is top notch, it happened to a lot of traders that kraken has capacity problems when there is a  lot of volatility in the market. That is problem when you want to react quickly to a market change or you want to buy/sell but the exchange is not responding.

Supported Payment Methods

• Wire Transfer.
• SEPA.
• SWIFT.
• CHAPS.
• FPBS/BACS.
• Osko.
• Interac-e transfer.
• Domestic wire transfer (Credit Union Atlantic).
• In-person cash or debit.
• Signet.
• Silvergate Exchange Network.
• FedWire.

Passive Income

Spot and derivatives trading is not the only way you can profit from your investments in Kraken, as the platform offers a staking section where users can lock their coins for as long as you want in order to earn interests on your holdings. This will give holders passive income on coins that otherwise would be just sitting there, making it possible for most users to mantain a healthy portfolio management. It is also known that compounding earnings is one of the best ways to grow one’s capital.
Kraken will let you stake the following coins:

• ALGO (4.75% yearly rewards).
• ADA (4-6% yearly rewards).
• ATOM (7.5% yearly rewards).
• ETH (4-7% yearly rewards).
• FLOW (6-9% yearly rewards).
• KAVA (23% yearly rewards).
• KSM (18% yearly rewards).
• DOT (12% yearly rewards).
• SOL (6.5% yearly rewards).
• XTZ (4.7% yearly rewards).
• BTC (0.25% yearly rewards).
• EUR (1.5% yearly rewards).
• USD (2% yearly rewards).

Users need to buy the selected assets or fund their Kraken accounts with any of these coins to start earning passive income. kraken works with on-chain and off-chain staking (on-chain staking works with PoS protocols such as XTZ, while off-chain assets while be staked with Kraken’s internal programs).

Market tracking features

Analyzing the crypto market is all about having the knowledge and the right tools to spot the big opportunities. Knowing this, Kraken created a market tracking tool called Cryptowatch, which works in crypto exchange platforms through their API keys and covers over 700 markets (trading pairs).
Cryptowatch has optimum indicators and real-time market trend tracking that, combined with a SMS notification system, aims to provide users sharp market analysis skills. It should be noted that unlike the charts, APIs and public REST, custom notification systems are not a free service.

Supported Countries

Kraken offers its services to more than 180 countries worldwide on 4 continents, including Europe, America, Asia, and Australia. There are only a handful of countries that are currently not supported. 

Kraken does not provide services to residents in the following countries:

• Afghanistan
• Cuba
• Guinea-Bissau
• Iran
• Iraq
• Japan
• North Korea
• Tajikistan
• Washington and New York states in the US

FAQ – Frequently asked questions about Kraken

Can you buy bitcoin on Kraken?|Yes, you can buy bitcoin directly on Kraken using bank wire transfers. In order to buy bitcoin on Kraken you need to verify your account first and then you can deposit into your account and place an order for buying bitcoin. Note that bitcoin is represented with XBT symbol on Kraken.
Is Kraken better than Coinbase?|In terms of fees Kraken definitely beats Coinbase. Coinbase charges a flat fee of $1.99 +3.99% for transactions with credit card. In contrast, Kraken only charges 0.26% trading fee for buying bitcoin. Although the fees are better on Kraken you might need to consider other aspects as well: Coinbase is more suitable for beginner users and also allows credit card purchases which are currently not an option on Kraken.
Can a US citizen use Kraken?|Yes, most US citizens can use Kraken as the company has complied with local regulations. Kraken, however, does not provide services to residents of Washington (WA) and New York (NY) states. Additionally, residents of New Hampshire (NH) and Texas (TX) states are not allowed to deposit, hold, trade EUR denominated trading pairs.

Has Kraken been hacked?|No, Kraken hasn’t been hacked so far. Although some individual users reported that their accounts have been compromised due to the lack of 2FA security, in general, the exchange did not suffer any major security breach. Still, Jesse Powell, the CEO of Kraken often warns the public to avoid storing crypto on exchanges.

Who owns Kraken?|Kraken is owned by Payward Inc., a San Fransico based startup, founded by Jesse Powell. Payward Inc. is private company, registered in the United States, California and was founded in 2011. Before founding Kraken, Jesse Powell ran other online businesses in the gaming industry, he is also passionate about art.

Is Kraken good for trading bitcoin?|Yes, Kraken is an exchange where you can trade bitcoin and several other cryptocurrencies. Their fees are reasonably low and you can also try margin trading at Kraken. Currently there are more than 30+ different trading pairs are availabe on Kraken exchange.

How do I withdraw USD from Kraken?|You can withdraw money from Kraken using bank wire transfer only. There are a couple of options you can choose from if you want to withdraw USD from Kraken depending on your geographic location. US clients can opt for ACH and FedWire, while the rest of the world can use SWIFT transfers. The fees vary between 5 USD to 35 USD depending on the amount and the processing time. Note that all first-time deposits go through a temporary 72-hour lockdown period and you can only withdraw funds after that. In order to withdraw funds from Kraken, go to withdraw in your account and select the option you need.

Does Kraken require an ID?|Not necessarily. When registering at Kraken, you need to provide them an email, your full name, date of birth, phone number and physical address, however, for the starter account this information is not verified by documents. You can start using the platform with cryptocurrency deposits right after registration. Although the crypto deposits are unlimited, without an ID verification, you can only withdraw 5000 USD worth of cryptocurrency on a daily basis, and 150 000 USD during a month. There is no option to use Kraken with fiat currency without submitting ID.

How can I get verified on Kraken?|There are two levels of verification available now on Kraken. For the intermediate verification, you need to provide a valid government-issued ID card (like passport, driving license, national identity card) and a proof of residence document aged less than 3 months (this can be a bank statement or utility bill). US clients also need to provide an SSN or an ITIN. In certain countries, you will be also asked to provide a confirmation photo of you holding your ID card. For the highest level of verification, on the pro level beyond the above-listed documents, you will be asked to fill out a KYC questionnaire.

How long does Kraken withdrawals take?|Withdrawal time on Kraken depends on the type of funding method you have chosen. Generally speaking, you should receive your withdrawal within 5 business days. The quickest options are FedWire transfers and SEPA transfers which usually take 0-3 days, while SWIFT transactions can take up to 5 business days to be processed.

Can I short bitcoin on Kraken?|Yes, you can short bitcoin on Kraken, so it is possible to sell bitcoin on Kraken without actually owning it. In the case of an XBT/EUR short position, Kraken sells XBT from their margin pool for EUR on the market. In order to settle this short position, you need to have sufficient XBT on your acount to cover the volume of the order opening.

How do you trade with leverage on Kraken?|You can trade with leverage on Kraken using intermediate and advanced order forms. Note that currently not all supported coins can be traded on margin, only a selected number of cryptocurrencies, including Augur, Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Monero, Ripple and Tether. Margin trading is available against the USD, EUR and XBT and in some cases against ETH. To be able to open a leveraged position, you must hold enough balance on your account to satisfy the margin requirement. Don’t forget that during margin trading you also have to pay the margin rollover fee for open positions beyond the usual trading fees.

What are the fees on Kraken?|Kraken applies a maker-taker fee model, where with the increase in volume the fees are decreasing. The standard maker-taker fee is 0.16%-0.26% up to 50000 USD monthly trading volume. For margin trades, Kraken charges a margin opening fee and a margin rollover fee after every 4 hours when the trade is open. Depending on the chosen payment method, Kraken also charges deposit fees for some type of SWIFT and ACH transfers.

Can you use a credit card to buy bitcoin on Kraken?|No, credit cards are not among the supported methods on Kraken for buying bitcoin. The reason for Kraken not allowing credit card purchases is Kraken does not want to risk any fraudulent deposits coming from unauthorized credit card usage. You can still buy bitcoin using bank wire transfers at Kraken.

Kraken Review Conclusion

The Kraken is a real industry leader, and one of the best bitcoin exchanges today.

Pros

• Low fees
• Excellent liquidity in both USD and EUR markets
• Margin and futures trading supported
• Only exchange platform selected to support investigation into Mt. Gox’s stolen Bitcoins
• Stable regulatory compliance towards the government under which it operates
• Plenty of tradeable cryptocurrencies
• Great security features
• Friendly interface and a lot of information about the exchange

Cons

• Sometimes has uptime problems when market gets hot.
• Verifications take time.
• Unlike many other Bitcoin exchange platforms, it does not work as crypto wallet.
• Although it is not solely a Bitcoin exchange for US, Kraken has a lot of restrictions for a wide range of countries, specially for credit card purchases.
• Compared to other exchange companies, Kraken’s services are quite limited.

If you’re looking for a safe exchange with low fees (especially if you’re in Europe), then Kraken is an obvious choice. Post your experience with Kraken exchange in the comments, we would love to hear from you.

Go to kraken.com